Corning to Acquire Alliance Fiber Optic Products
Corning and Alliance Fiber Optic Products recently announced that they have entered into a definitive merger agreement.
Corning Inc. and Alliance Fiber Optic Products, Inc. recently announced that they have entered into a definitive merger agreement under which Corning will acquire Alliance Fiber Optic Products, Inc. Under the terms of the agreement, Corning will make an all-cash tender offer to acquire all of the outstanding common shares of Alliance Fiber Optic Products for $18.50 per share, representing a transaction value of approximately $305 million.
Alliance designs and manufactures high-performance passive optical components, which are used in several of Corning’s existing connectivity solutions. Upon closing of the acquisition, Corning will integrate Alliance into its Optical Communications business segment. Corning expects the acquisition to expand its market access to cloud data center operators and OEMs, broaden its presence in Asia, and provide product and cost synergies. Corning expects the acquisition to be accretive to its earnings per share during the first year.
“Combining Alliance’s components expertise with Corning’s broad portfolio of connectivity solutions further strengthens our position in the high-growth, cloud data center market segment,” said Clark S. Kinlin, executive vice president of Corning Optical Communications. “And, it adds additional products that Corning can offer our broad customer base while providing an opportunity for manufacturing synergies.”
“We are excited to join forces with Corning,” said Peter C. Chang, founder and CEO of Alliance. “We believe Corning’s scale provides an excellent platform for our products to access a broader customer base and drive a higher level of growth than we would be able to achieve as a standalone company. Our board believes that this transaction is in the best interests of our stockholders and provides our stockholders with substantial cash value for their investment. In addition, we believe becoming part of a larger company with Corning’s strong track record benefits both our employees and customers.”
The boards of directors of both companies have approved the transaction, which is expected to be completed in the second quarter 2016. The completion of the tender offer is subject to the satisfaction of customary closing conditions, including that a majority of the outstanding shares of common stock of Alliance (calculated on a fully diluted basis) are tendered into the tender offer and regulatory review.